Arrow Electronics (ARW) investor relations material

Executive summary

• Record Q3 revenue of $10.718B, up 39.0% YoY; GAAP diluted EPS was $6.17 and non-GAAP diluted EPS was $6.22, up 158.1%.

• Broad-based demand and backlog conversion supported growth across Global Components and Global ECS, with improving leading indicators.

Financial highlights

• Q3 non-GAAP operating income rose 100.6% YoY to $436M; non-GAAP operating margin expanded 130 bps to 4.1%.

• GAAP operating income was $430.3M, up 140.4%; net income attributable to shareholders was $318.4M, up 191.6%.

• Non-GAAP gross margin was 10.8%, flat YoY; non-GAAP operating expenses rose 16.8% to $719M, while expenses as a share of gross profit fell 130 bps to 62.3%.

• Nine-month sales grew 36.5% to $30.184B; net income attributable to shareholders was $826.2M and diluted EPS was $15.97.

• Non-GAAP EPS growth reflected sales volume, productivity-driven leverage, lower interest expense and a tax settlement.

Outlook and guidance

• Q4 sales guidance is $11.55B–$12.15B, including $8.15B–$8.55B for Global Components and $3.40B–$3.60B for Global ECS.

• Q4 diluted EPS guidance is $6.25–$6.45 GAAP and $7.00–$7.20 non-GAAP; expected tax rate is 23%–25% and interest and other expense is ~$50M.

• Currency is expected to reduce Q4 YoY sales by ~$88M and EPS by $0.14; sequentially, currency is expected to reduce sales by $86M and EPS by $0.07.

• Global Components Q4 growth is expected to be primarily unit-volume driven; ECS hardware mix is expected to lift gross-basis sales recognition, with billings-based margins relatively unchanged YoY.